Moore: "Scottish Government must explain £41bn oil deficit"

An analysis of GERS figures show the Scottish Budget has run a deficit over the past three decades

The Scottish budget - even including every penny of oil and gas revenue - has run a £41 billion deficit over the past 30 years, according to a forthcoming Scotland Office analysis of official figures.

The Secretary of State said the figures show that including oil and gas revenues could not pay for the same level of spending in a separate Scotland and called on the Scottish Government to explain exactly how much a separate Scotland would cost.

Scotland Office economists are set to produce figures, based on the Scottish Government’s own GERS data, which demonstrate the continuing economic benefits of the United Kingdom and the dangers of opening up an economy to the peaks and troughs of oil prices.

A separate Scotland would face fluctuations in its annual budget because of the year to year changes in the value of oil revenue.

For instance, over the past two years oil and gas revenues have accounted for 1.3% and 2.4% of overall UK tax revenue.

In a separate Scotland, these revenues would have seen oil and gas account for 13% and 23% of the budget in those respective years, creating significant year-on-year changes to the amount Scotland had to spend and making forward budgeting extremely difficult.

Michael Moore said:

“It is time for straightforward answers on the Scottish budget and oil and gas revenues. We have seen a raft of claims about those figures recently but the people of Scotland deserve to have the numbers at their disposal and an understanding of what independence would mean for Scotland’s budget.

“Many supporters of separation point to North Sea oil and gas revenues when they start talking about how an independent Scotland would be financed. But the truth is that the facts don’t back up this logic.

“Economists in the Scotland Office have studied the Scottish Government’s own revenue and expenditure figures and produced data which puts North Sea revenues into some proper context.

“These figures show that in the last 30 years, the UK and Scottish Governments have spent £197bn more in Scotland than the total tax generated in Scotland.

“If you had allocated every single penny of oil and gas revenues to Scotland over the past 30 years - a figure of £156 billion - then you would still fall £41 billion short of what both governments have actually invested in Scotland.

”The oil and gas sector is absolutely vital for Scotland and Britain. Let there be no doubt about that. But when we start talking about how a separate Scotland will be financed then we should also stick to the facts.

”The Scottish Government has tell us what the financial cost of independence would be for Scotland. They must provide answers.”